Pension age rise ‘delayed’ by election rules

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THE UK government has delayed its response to a report that recommended increasing again the state pension age for millions of Britons.

Ministers had been expected to publish their timetable for future state pension age increases by May 7, a legal deadline, following a year-long independent review.

But the Department for Work and Pensions said it could not make decisions on long-term policy changes before the general election on June 8 because publishing its response could breach the convention that applies during the pre-election period.

“This is a crucial issue for the long term management of both the public finances and the savings of individuals,” a DWP spokesperson said.

“Therefore it is important that policy is made by a government with the power to act on that policy, which will now be the government formed after the general election,” they added.

“The delay incurred in waiting to publish the report will have no detrimental impact on the public.”

John Cridland, the former director-general of the CBI employers’ organisation, had carried out the independent year-long review considering when and how the state pension age should be lifted. In his final report in March, Mr Cridland recommended that the state pension age rise from 67 to 68 by 2039, seven years earlier than the government timetable suggests.

Experts said the changes would affect about 5.4m people under the age of 45. The current age at which people can collect their pensions is 64 for women and 65 for men. The threshold is set to rise to 65 for both by the end of next year, 66 by 2020, and 67 by 2028.

The government was also considering a more aggressive timetable for state pension age rises that could leave millions of people in their twenties unable to claim their state pension until they are at least 70.

Tom McPhail, head of retirement policy with Hargreaves Lansdown, said: “There are no votes to be won in telling people they have to work longer, so it is hardly surprising the government has chosen to kick the can down the road until after the general election. Nevertheless, whoever forms the next government, this challenge will have to be addressed and sooner rather than later,” he added.

“Under some models explored by John Cridland and the government actuary, state pension ages could be rising to 70 for some in their 30s today, so people need to know what to expect.”

Steven Cameron, pensions director with Aegon, a pensions provider, said decisions on future increases in state pension age would affect people for decades to come, and it was right for the government not to rush out a pre-election commitment.

“Voters deserve to know what plans each political party has for the state pension, both the age from which it comes into payment and also how increases will be determined,” he added.

“State pensions face an ongoing challenge from demographic changes and increases in life expectancy and as funded by the working population, need to be affordable long term. Party political manifestos should be bold and set out their state pension stall in detail.”

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